Assume That a Particular Firm Has a Total Asset Turnover

question 101

Multiple Choice

Assume that a particular firm has a total asset turnover ratio lower than the industry norm. In addition, this firm's current ratio and acid test ratio also meet industry standards. Based on this information, we can conclude that this firm must have excessive

• A) accounts receivable.
• B) fixed assets.
• C) debt.
• D) inventory.

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Definitions:

Paying Customer

An individual or entity that purchases goods or services from a business.

Internal Customer

An individual or department within an organization that receives services or products from another department or individual in the same organization.

External Customer

Individuals or entities outside of an organization who use or purchase its products or services.

Good Feelings

A state of emotional positivity, satisfaction, or happiness experienced by individuals or groups.